How did the IPO for the makers of the Open Table reservation system go today?
OpenTable Inc. saw its shares surge nearly 60% in its trading debut Thursday following an initial public offering that priced above the company’s expectations. Late Wednesday, OpenTable /quotes/comstock/15*!open/quotes/nls/open (OPEN 31.57, -0.32, -1.00%) priced its initial public offering at $20 a share — above its planned IPO range of $16 to $18 a share. The stock closed trading up $11.89 at $31.89 on the Nasdaq — more than double the initial price range the company sought earlier this week, before it raised its price range. The pricing and trades raised concern with IPO analyst Scott Sweet, who called the deal “reminiscent of the 1999-2000 IPO pricings” in an e-mailed comment. “This IPO environment has not and should not see a pricing like this, considering this type of company is very prone to the recession that many are predicting will go well into 2010,” said Sweet, managing partner of IPO Boutique. OpenTable, which provides an online reservation system for restaurants, is the
The burst of enthusiasm over the debut of the online restaurant reservation service, Open Table Inc., is fueling hopes among investors that this deal and the initial offering of SolarWinds will end the IPO drought in Silicon Valley. Don’t be so sure about that. Some IPO experts believe that the exuberance over Open Table (OPEN 28.70, -0.01, -0.04%) is premature. The ongoing recession hurts restaurant dining – the company’s bread and butter. San Francisco-based OpenTable swung to a net loss in the fourth quarter of 2008 in the midst of the economic crunch, though it did manage to swing back to profitability in the first quarter. See full story. But IPO investors seem thirsty after a long drought. OpenTable’s shares were up 50% to $30 by late Thursday afternoon, after being priced above the planned IPO range of $16-$18. “I believe that once sanity prevails, it will likely trade down hard,” Scott Sweet, senior managing partner of the IPO Boutique, said in an e-mailed comment. Some of the
OpenTable Inc (OPEN.O) shares jumped 72 percent in their trading debut Thursday following the restaurant reservation company’s initial public offering, putting it on pace for the biggest first day performance for a U.S. company in more than a year. In afternoon trading on Nasdaq, the shares were changing hands at $33.55, a day after the company raised a more-than-expected $60 million in its IPO. The gains were in contrast to the 2.44 percent decline of wider Nasdaq Composite Index .IXIC by late-afternoon. Shares started trading at a 22.5 percent premium over the $20 IPO price, above the expected range. “It’s such a small deal and people are interested in the brand name, plus it’s the first real VC-backed IPO by a Silicon Valley firm in a while,” said Nick Einhorn, an analyst with Connecticut-based Renaissance Capital. OpenTable sold a modest 3 million shares, something Einhorn said will make the stock more volatile and could explain its strong debut. Sources:
